(MARITIME EDUCATION AND TRAINING CENTER)

RESEARCH
IN
SOC-SCI 4-A
D/C: MANGUBAT, JOSHUA V.
STUDENT
MRS. CARMELITA MERCADO
INSTRUCTOR

CIGARETTES TAXIATION IN THE

PHILIPPINES
INTRODUCTION
The Philippines is one of the largest consumers of cigarettes in the Western
Pacific Region with over 19 million smokers. Nearly 30% of Filipinos consume
some type of tobacco product 47.7% of men smoke while 9% of women smoke.

DISCUSSION

The taxes are going up again today. This is the fourth year in a row that
levies on the so-called sin products have increased under the Sin Tax Reform Bill
passed by Congress in December 2012. President Aquino signed the measure into
law that same month. Before that, the tax rates had not been adjusted since 1997.
Under the law, the excise tax on cigarettes packed by machine goes up by P4 from
P21 in 2015 to P25 per pack this year, if their net retail price (excluding the excise
tax and value added tax) is P11.50 and below per pack. When the Sin Tax Reform
Law took effect on Jan. 1, 2013, the tax rates were P12 and P25. In the case of
cigarettes packed by hand, there is a uniform tax, which goes up by P3 per pack,
from P18 to P21.
Most cigarettes are packed by machine. For cigars, the specific tax initially
pegged at P5 apiece and imposed starting Jan. 1, 2014 is to be increased by four
percent through a revenue regulation the secretary of finance is mandated to issue.
Aside from the specific tax, there is an ad valorem tax of 20 percent on the cigars
net retail price.

For fermented liquors, the tax goes up to P21 per liter from P19, if the net
retail price does not exceed P50.60 per liter. The levy is P23, up by P1, if the retail
price is above P50.60. Fermented liquors include beer, lager, ale, porter and similar
products, except local concoctions like tuba, basi and tapuy. The tax will also
increase for other sin products like distilled spirits and wines.
In the past, certain tobacco and alcohol producers advanced their deliveries
so these would not be covered by the higher tax. According to the Bureau of
Internal Revenue, sin tax collections from January to November this year
amounted to P123.641 billion. The bulk of the revenues came from cigarettes and
other tobacco products (P86.338 billion), followed by fermented liquors (P25.246
billion), distilled spirits (P12.029 billion) and wines (P28 million).
Under the law, 15 percent of incremental collections will go to tobaccoproducing provinces. The money is to be spent for the benefit of tobacco farmers.
The bulk of the remaining collections will go to the governments universal health
care program, which provides Phil Health insurance coverage to millions of poor
families. Part of the increment is to be apportioned among congressional districts
for medical assistance and health facilities.
The Sin Tax Reform Law amended the National Internal Revenue Code of
1997, the statute that many congressmen and senators were trying to change so that
income tax rates could be adjusted for inflation.

REFERENCES
http://www.philstar.com/headlines/2016/01/01/1538254/cigarette-alcohol-taxesgoing-again
global.tobaccofreekids.org/files/pdfs/en/Philippines_tobacco_taxes_summary_en
.pdf
tobacconomics.org/wp.../04/BGI-Report_Philippines_August-28-2012_final11.pdf
http://newsinfo.inquirer.net/698744/sin-tax-cuts-cigarette-smoking-in-philippineshenares
www.bir.gov.ph/index.php/tax-information/excise-tax.html